KSAMC wants JPS to pay encroachment fees

Observer writer

Monday, September 24, 2018

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A suggestion made at last Friday's Finance Committee meeting of the KSAMC for the local authorities to charge the Jamaica Public Service Company (JPS) encroachment fees of four per cent of its net income, is to be presented to Kingston Mayor Delroy Williams for further examination and discussions.

The suggestion for the municipalities to charge the JPS encroachment fees of four per cent of its net income was made by People's National Party (PNP) Councillor Dennis Gordon (Maxfield Park division).

Gordon's suggestion was made after the meeting was told that research showed that the municipalities islandwide could earn US$17 million in encroachment fees from JPS for six months.

Earlier this year a legal opinion from the attorney general stated that the municipalities islandwide had a right to charge the utility companies easement fees.

The April meeting of the Finance Committee which discussed the cess on the utility companies as one of the ways to increase income, decided to set up a subcommittee consisting of eight councillors — five from the Jamaica Labour Party and, three from the PNP — and three other individuals.

At the meeting on Friday, Vernon McLeod, chairman of the Finance Committee, reported on the subcommittee discussions.

He said that research findings presented to the committee showed that the JPS' six months' gross earnings was US $431 million.

On the basis of research done on how formula charges were being done under other jurisdictions, and based on the JPSCo June 2018 published report, if the council applied four per cent, the lowest tier of the research, all of the municipalities could earn US$17 million in encroachment fees from JPS for six months, McLeod said.

McLeod said that the subcommittee discussed the implications the charges could have for the general public, as the JPS would likely deem the encroachment fees a tax that would likely be passed on to consumers.

Also explored by the subcommittee was the possibility of the intervention by the Minister of Finance if the charges were going to have national implications.

The subcommittee was of the view that the easement charges should be discussed with the Ministry of Local Government and the Minister of Finance prior to a final decision being taken.

The legal analysis stated that under Section 23 of the Electricity Act (2015), the JPS in order to place or move any transmission line or distribution line above ground, underground, along, over, or across any street, “requires the express written consent of the relevant municipal corporation/local authority”.

It also pointed out that under Section 4 of the Parochial Roads Act, powers were granted to municipal corporations “for the exclusive care, management, control and superintendence over all highways, public roads, thoroughfares, streets, lanes, aqueducts, and bridges in the parish for which it is appointed, with some exceptions”.

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